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Inovio Pharmaceuticals (INO) has now initiated legal proceedings as an emergency action to compel the technology transfer required for the planned large-scale manufacture of its COVID-19 vaccine candidate.
The company has an ambitious goal of producing one million doses of INO-4800 by the end of 2020, with its existing capacity and contract resources, for further clinical trials or emergency use.
To fulfil this goal, INO has filed a complaint in Pennsylvania to compel VGXI, Inc. and GeneOne Life Science to facilitate the transfer of manufacturing methods, using VGXI’s technology, to the company’s new engaged contract manufacturers.
“The Company believes that widespread availability of its potential COVID-19 vaccine, which can only be achieved through accelerated large-scale manufacture following clinical trials and regulatory approval, is essential to combat the ongoing global coronavirus pandemic” INO states.
Under the companies’ Supply Agreement, VGXI produces and supplies the DNA plasmids for the INO’s research and early clinical trials for its product candidates.
However VGXI allegedly informed Inovio that it did not have the capacity to manufacture the full order of DNA plasmids on the requested timeline, nor would it be able to manufacture plasmids for the commercial sale of INO-4800, if the vaccine were approved.
It subsequently refused to transfer the technology to INO’s third party contract manufacturers.
In January 2020, INO began preclinical studies of INO-4800, and in April it received approval from the U.S. FDA to begin a Phase 1 clinical trial of INO-4800. If the initial safety and immunogenicity data from the Phase 1 trial are acceptable, INO plans to advance the development of INO-4800 into later-stage efficacy trials in the second half of 2020.
In a further dose of bad news, Inovio has not been selected by the Trump administration as one of the five companies picked to develop a COVID-19 vaccine as part of the government’s Warp Speed operation. The companies selected will receive additional government funding, assistance in clinical development and manufacturing to ensure the availability of two hundred million doses by YE2020.
“Given INO’s notable omission from this list, we see these developments as a negative read-through to INO shares, though we would await a formal announcement, given INO’s need for external funding in further clinical development and manufacturing scale-up of their ph.I candidate, INO-4800” commented RBC Capital analyst Gregory Renza. Indeed, shares fell 13% on June 3, and are now falling 5% in Thursday’s pre-market trading.
However the anlayst adds “While the news can be seen as initially disappointing… we think the announcement would not preclude INO from an ultimately successful development of a COVID-19 vaccine as they continue to leverage external funding support funding and maintain active engagement with gov’t agencies and other funders.”
Renza reiterated his Hold rating on the stock with a $10 price target (20% downside potential) on June 3. INO stock has exploded over 270% year-to-date, and analysts have a cautiously optimistic Moderate Buy consensus on the stock’s outlook. That’s with a $17 average analyst price target for further upside potential of 34%. (See INO stock analysis on TipRanks).
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